Chap. 62:01 Petr oleum PETROLEUM REGULA TIONS€¦ · L.R.O. 1/2006 [Subsidiary] LA WS OF TRINIDAD...

LAWS OF TRINIDAD AND TOBAGO

30 Chap. 62:01 Petroleum

SUBSIDIARY LEGISLATION

PETROLEUM REGULATIONS

ARRANGEMENT OF REGULATIONS

REGULATION

1. Citation.2. Interpretation.

LICENCES FOR PETROLEUM OPERATIONS

3. Licences for petroleum operations.4. Orders as to competitive bidding.5. Procedure on competitive bidding.

FORM OF APPLICATIONS FOR LICENCES

6. Form and contents of application for licences.7. Notice of change of particulars in application.8. Documents as to title required for certain licences.9. Fee on application.

10. Pipeline Licence.11. Limitations as to size and position of areas.

PIPELINES

12. Permission to survey for laying pipelines.

DURATION

13. Term of certain licences.14. Further renewals.15. Special cases of renewals.16. Conditions of renewal.17. Duty to reduce by half the extent of licensed areas after six years.18. Saving as to surrender provisions.

APPLICATIONS FOR LICENCES, ETC.19. Publication of applications.

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[Subsidiary]Petroleum Regulations


Petroleum Chap. 62:01 31

REGULATION

20. Petroleum register.

21. Notification of grant, renewal, surrender, etc., of licences.

GRANT AND FORM OF LICENCES

22. Fees.23. Terms of licences.24. Time limit for issue of licences.25. Issue of licences in private petroleum rights.26. Common carrier pipelines.27. Joint use of certain pipelines.

ASSIGNMENT

28. Provisions as to assignments.29. Additional provisions as to assignments.

OPERATORS RIGHTS

30. Exclusion of certain areas from exploration.

31. Acts and things which may be done by a licensee.

32. Right of licensee to petroleum won.

33. Use of water on State Land.

34. Power of licensee to enclose leased land.

35. Notice as to cutting and felling trees.

36. Cutting or felling timber.

37. Surrender of portion of licensed area for public purposes.

38. Sale or lease of portion of licensed area.

39. Land leases to enable conduct of submarine operations.

40. Use of ports and other facilities.

41. Natural gas used in refining by the producer.

GENERAL OBLIGATIONS

42. General obligations of licensees.

[Subsidiary] Petroleum Regulations



ARRANGEMENT OF REGULATIONS—ContinuedREGULATION

TECHNICAL OBLIGATIONS

43. Technical obligations of licensees.

WORK OBLIGATIONS

EXPLORATION AND PRODUCTION(PUBLIC PETROLEUM RIGHTS) LICENCE

44. Expenditure obligation.45. Guarantee as to expenditure obligation.46. Report of expenditure to be made to Minister.47. Shortfall in expenditure obligations.48. Time limit for commencement of exploration.49. Maximum period for commencing drilling.50. Duty to produce petroleum on discovery in commercial quantities.51. Refining Licence and erection of refinery.52. Saving as to regulation 51.53. Duty to refine locally.54. Power to require refining as to whole of production.

FINANCIAL OBLIGATIONS

55. Financial obligations specified.

MINIMUM PAYMENTS AND RENTAL ON EACH LICENCE

56. Minimum payment to be specified.57. Payable quarterly.58. Minimum payment where less deductible from royalties.59. Distraint by Minister.60. Surface rents for leases of State Lands.

ROYALTY

61. Royalty payable at stipulated rate.62. Petroleum used in petroleum operations of licensee, exempted.63. Power of Minister to reduce royalty.

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64. Election to take petroleum instead of royalty.65. Method of sampling crude.66. Value of crude—field storage value.67. Value of natural gasoline—field storage value.

67A. Calculation of field storage value.68. Agreement as to prices in certain cases.69. Value of natural gas—how determined.70. Quarterly instalments of royalty payable.71. Annual statement of royalties calculated and assessed for

accounting period.

PETROLEUM IMPOST

72. Petroleum impost charged.73. Petroleum impost to cover expenses of administration.74. Impost on cessation of petroleum operations.

OTHER PAYMENTS

75. Licensees liable to income tax and corporation tax.76. Import and export duties payable but subject to exemptions.77. Usual rates and charges payable by licensees.78. Additional deposits.79. Orders as to forfeiture of deposits.80. Currency payable in respect of financial obligations.

INFORMATION

81. Licensees to furnish data.82. Licensees to supply maps, etc.83. Annual report by Petrochemical Licensee.84. Monthly report of Petrochemical Licensee.85. Annual return as to accounts of Petrochemical Licensee.86. Initial return on commencement of production by Petrochemical

Licensee.

REGULATION




ARRANGEMENT OF REGULATIONS—ContinuedREGULATION

DETERMINATION

87. Voluntary determination of licence.

MISCELLANEOUS PROVISIONS

88. Power to permit mining for other minerals in licensed areas.89. Petroleum operations in submarine areas—rights to foreshore.90. Price Orders— petrochemicals.91. Minister may remedy default of licensee.92. No alteration to plant, etc., without permission.93. Unused natural gas.94. Offences and penalties.

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[Subsidiary]



PETROLEUM REGULATIONS

made under section 29

1. These Regulations may be cited as the Petroleum Regulations.

2. In these Regulations—“barrel” means a unit of volume equal to forty-two United

States gallons;“bunkering” means the supply of petroleum products for use as

fuel by a ship or aircraft;“crude oil” means petroleum in the liquid state;“effective date” means the date on which a licence comes

into force;“peddling”, or “peddling operations” means small wholesale

transactions of less than 600 Imperial gallons of refinedpetroleum products other than gasoline;

“well” means any borehole drilled or sunk for any purposeand all works connected with, adjacent to, and belonging tothe borehole.

LICENCES FOR PETROLEUM OPERATIONS

3. (1) Subject to subregulation (2), the licences that may beissued to persons to engage in petroleum operations shall be—

(a) an Exploration Licence;(b) an Exploration and Production (Public Petroleum

Rights) Licence;(c) an Exploration and Production (Private Petroleum

Rights) Licence;(d) a Refining Licence;(e) a Liquefaction of Natural Gas Licence;(f) a Pipeline Licence;(g) Transportation (other than by pipeline) Licence;

5/1970.[100/1974113/197446/19816 of 1989137/1989190/198981/1994264/1998129/2001].Citation.

Interpretation.[100/1974].

Licences forpetroleumoperations.[100/197481/1994].




Orders as tocompetitivebidding.

Procedure oncompetitivebidding.

(h) a Marketing Licence, in respect of any one ofthe following operations, that is to say:

(i) wholesale;(ii) peddling;

(iii) retail transactions at petrol fillingstations; or

(iv) bunkering (including the supply ofpetroleum products to a marketinglicensee’s own ship or aircraft);

(i) a Petrochemical Licence;(j) a Compressed Natural Gas Licence in respect of

any one of the following:(i) service;

(ii) marketing; or(iii) consumer refuelling.

(2) A person who desires to operate as a contractor oragent of a licensee for the purpose of carrying out activitiesprescribed by Order made by the Minister directly connected withpetroleum operations carried out by such licensee, shall himselfobtain a licence for such purpose.

4. (1) Where the President has under section 10 of the Actdetermined that an area shall be subject to competitive bidding,the Minister shall make an Order to that effect and such Ordershall be published in the Gazette and in at least one daily newspapercirculating in Trinidad and Tobago.

(2) The Order shall, in respect of each area declared bythe President to be open for competitive bidding, specify thegeographical description, the period during which the bids may bepresented and any other conditions and details which the Ministermay consider proper for the purpose.

(3) The Minister may, at his discretion, make a chargefor any relevant information supplied by him.

5. (1) A person wishing to participate in bidding shall submithis proposals to the Minister in the form and within the periodprovided for by the Order.

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(2) The Minister after examining the proposals receivedshall, after consulting with the Minister of Finance, select therefromthe proposals he considers to be in conformity with the interests ofthe country having due regard to all relevant factors, save that theMinister may where he thinks fit reject all proposals.

FORM OF APPLICATION FOR LICENCES6. Every application for a licence shall be made in

writing addressed to the Minister, and shall contain thefollowing particulars:

(a) the name, nationality, place of business and natureof business of the applicant and, if the place ofbusiness is outside Trinidad and Tobago, thename, nationality and residence of a dulyauthorised agent in Trinidad and Tobago;

(b) type of licence for which application is made;(c) in relation to applications for a Refining Licence,

the project of all the refining installationsproposed with all necessary supporting plans andexhibits, including a site plan in respect of therefining and auxiliary installations, together withevidence that such planning permission as maybe necessary under the Town and CountryPlanning Act has been granted;

(d) in relation to—(i) the construction of new retail marketing

stations; or(ii) any substantial modifications to an

existing station,that prior permission has been obtained from theappropriate authorities and submitted to theMinister, ensuring compliance with all thestatutory provisions in respect of traffic, town andcountry planning, public health and other relevantwritten laws;

Form andcontents ofapplication forlicences.

Ch. 35:01.




(e) where applicable, a description of the site orproject, as the case may be, illustrated by a planor map to be prepared to such scale as the Ministermay require, of the situation, boundaries and areaof the parcels of land with respect to which theapplication is submitted and in the case of anyland referred to in section 2(3) of the Act suchother particulars as may be required in order toidentify them;

(f) where applicable, a description of the operationintended to be carried out including the methodsto be used, the capacity of the plant and nature ofproducts produced, and a copy of the relevantfeasibility study and a statement indicating thesource or sources from which the petroleum orproducts, or both, will be obtained and analysesof these substances;

(g) a statement of the capital investment involved andevidence, in such detail as the Minister mayrequire, as to the applicant’s financial andtechnical competence for undertaking theoperation applied for, and his ability to obtain therequisite personnel and equipment;

(h) in relation to applications for a licence underregulation 3(1)(h)(iii), any relevant agreementbetween the applicant and the Marketing Licenseefor wholesale operations;

(i) in relation to applications for a Pipeline Licencefor the installation and operation of a new trunkpipeline, the route, the length, the diameter andother particulars (to be shown on a map) of theproposed pipeline, its boundary lines, the namesof the owners of the land over which it wouldpass, the location of pumping and terminalstations and their capacities, the estimated cost

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of construction and such other information as maybe necessary in order to make clear the purposeand the nature and specifications of the pipeline.

7. If before the application is granted or refused, a changeoccurs in respect of any of the particulars contained in theapplication, such change shall forthwith be brought to the noticeof the Minister by the applicant.

8. An application for an Exploration and Production(Private Petroleum Rights) Licence shall contain the registerednumbers of the documents evidencing title to the Private PetroleumRights concerned.

9. Except in the case of an application for a licence inaccordance with section 38 of the Act, and any application for therenewal of any licence there shall be sent with each application afee of five hundred dollars. If the application is refused, the Ministershall refund to the applicant one-half of the fees thus paid.

10. (1) The holder of an Exploration and Production Licenceor a Refining Licence is required to apply for a Pipeline Licenceonly if the pipeline which he proposes to lay extends beyond thearea covered by his licence.

(2) Where any length of a pipeline is to be laid along oracross a road, waterway or railway, or upon or under the surfaceof the sea or in the vicinity of a harbour, the Minister shall consultwith the appropriate Government Ministry or Department orStatutory Authority with a view to ensuring that the road, waterway,railway, sea or harbour is not thereby rendered unsafe, contaminatedor polluted.

(3) Where, in the case of an application for a licence underregulation 3(1)(h)(iii), the Minister or any other GovernmentMinistry or Department or a Statutory Authority has objection to aproposed station site forming the subject of the application, theMinister shall reject it.

Notice ofchange ofparticulars inapplication.

Documents as totitle required forcertain licences.

Fee onapplication.[6 of 1989].

PipelineLicence.




11. In relation to Exploration and Production (PublicPetroleum Rights) Licences, except where special exemption isgranted by the Minister—

(a) no application shall be considered in respect ofan area less than five hundred acres in extent;

(b) in no case shall an area in excess of five blocksof eighty-five thousand acres each be grantedunder one licence;

(c) every grant of such licence shall be in respect ofcontiguous blocks.

PIPELINES12. Any person desiring to construct a pipeline for the purpose

of conveying petroleum or petroleum products or other substancesprescribed by Order shall apply to the Minister for permission tocarry out a topographical or other survey with a view to selectingthe route of the proposed pipeline.

DURATION13. (1) The term for which an Exploration Licence shall be

granted shall not exceed three years, but may be renewed fromtime to time for any one period not exceeding three years at thediscretion of the Minister as to the whole or part of the area includedin the licence.

(2) The term for which an Exploration and Production(Private Petroleum Rights) Licence may be granted shall be twentyyears, subject to renewals for successive periods of twenty years.

(3) The initial term for which an Exploration andProduction (Public Petroleum Rights) Licence is granted shall besix years.

(4) The Minister, on being satisfied that continuedexploration will enhance the identification and evaluation of thecountry’s petroleum reserves and on considering it to be in thepublic interest may extend the initial term granted undersubregulation (3) for such period as he considers necessary.

Limitations as tosize and positionof areas.

Permissionto surveyfor layingpipelines.

Term of certainlicences.[190/1989].

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(5) The licence may be renewed for a term which, in thediscretion of the Minister, may not exceed twenty-five years in thelight of the circumstances then prevailing, as to a part of the originalarea as hereinafter provided on application by the licensee not lessthan one hundred and eighty days before the expiry of the termreferred to in subregulation (3) or (4) as the case may be.

(6) Subject to regulation 87, during the first three yearsof the six-year period referred to in regulation 13(3), explorationoperations shall not be suspended for any reason except forcemajeure as defined in section 19 of the Act.

14. (1) Where a licensee notifies the Minister at least twoyears before the end of the term provided under regulation 13(5),of his desire further to renew the licence, it shall be extended forfive years in accordance with the terms which shall be laid downby the President, in the light of the circumstances then prevailing.

(2) The Minister may grant further five-year extensionsfrom the end of each renewal period in the same manner as hasbeen laid down in subregulation (1).

15. (1) In the case of licences granted for refining, pipelineor petrochemical operations, the original period shall be twentyyears, but such period shall be renewed, at the licensee’s request,for successive periods each not exceeding ten years.

(2) In the case of marketing licences granted inrespect of wholesale transactions, the original period shall be tenyears in the case of peddling and retail transactions one year,and in the case of bunkering ten years. The licences shall berenewed for successive periods each of ten years, one year and tenyears, respectively.

(3) Notwithstanding regulations 13 and 14, in the case ofan Exploration and Production (Public Petroleum Rights) Licencegranted in respect of exploration and production operations—

(a) where, before the expiration of the original period,the licensee notifies the Minister of his intentionto continue to undertake offshore petroleum

Furtherrenewals.[190/1989].

Special casesof renewals.[100/1974264/1998129/2001].




operations, such period shall be renewed at thelicensee’s request—

(i) for a period of twenty-five years, from thedate on which the request is made to theMinister; and

(ii) for a successive period not exceeding tenyears at the discretion of the Minister;

(b) the renewal period of twenty-five years shall becounted from the day after the expiration of theoriginal period.

16. For the purpose of regulation 15, all renewals thereinprovided for shall notwithstanding regulation 17 (1) be upon suchterms and conditions as may be agreed at the time of the renewal.

17. (1) Subject to regulation 18, in the case of an Explorationand Production (Public Petroleum Rights) Licence, the licensedarea shall be reduced to fifty per cent, not later than the endof the sixth year from the effective date, in accordance withthis regulation and the part of the original area not surrenderedmay be further reduced in the manner specified in the licence.

(2) Unless the licence is earlier surrendered, the licenseeshall furnish the Minister with a description of the boundaries ofthe part to be surrendered not less than three months in advance ofthe due date of the surrender provided for in subregulation (1).

(3) The area to be surrendered shall consist as far aspracticable of rectangular blocks bounded by lines running eitherdue North and South or due East and West in a manner to bespecified in the licence.

(4) Subregulation (3) shall apply where a licenseevoluntarily surrenders a part of the area of his operation in theexercise of his rights of partial determination of his licence.

18. (1) The Minister may, where he considers it to be in thepublic interest, allow the surrender of a lesser portion of the originalarea than the area specified in regulation 17.

(2) Where the original area does not exceed five thousandacres, no reduction of the area shall take place.

Conditionsof renewal.[129/2001].

Duty to reduceby half theextent oflicensed areasafter six years.[190/1989].

Saving as tosurrenderprovisions.

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APPLICATIONS FOR LICENSES, ETC.19. On receipt of an application for a licence in respect of any

petroleum operation, the Minister shall cause notice of suchapplication when published in the Gazette to be sent to the DistrictRevenue Officer of such Ward or Wards to which the applicationrelates. The notice shall be exhibited for three weeks in aconspicuous place at the office of the District Revenue Officer.

20. (1) The Minister shall cause a petroleum register to beinstituted and maintained in the Ministry for the registration ofall applications for, and the grant, assignment, renewal, surrender,termination and revocation of licences and other particularsrelating thereto.

(2) The petroleum register shall contain a record of anyCourt decisions, arbitration awards, deeds or instruments of anykind relating to petroleum rights.

21. The Minister shall as soon as possible after the grant,assignment, renewal, surrender, termination, or revocation of anylicence cause to be published notice of the fact in the Gazette statingthe name of the holder of the licence, or of the assignee, and locationof the area.

GRANT AND FORM OF LICENCES22. (1) Subject to subregulations (2) and (3), upon the

issue or renewal of any licence [other than a licence underregulation 3(1)(g)] a fee of four thousand dollars shall be payable,except that in the case of an application for a licence in accordancewith section 38 of the Act, no fee shall be payable.

(2) In the case of a licence under regulation 3(1)(h)(iii)the fee shall be based on the annual total sales of all grades ofgasoline for the immediately preceding year and shall be as follows:

(a) for sales in excess of 1,000,000 litres …(b) for sales between 500,000 and

1,000,000 litres … … …(c) for sales less than 500,000 litres …

$400.00

$200.00$100.00

Publication ofapplication.

Petroleumregister.

Notification ofgrant, renewal,surrender, etc.,of licences.

Fees.[6 of 1989].




(3) In the case of a marketing licence for peddlingoperations, the fee shall be fifty dollars.

23. (1) Each licence shall contain such terms and conditionsas the Minister may, subject to the provisions of the Act and theseRegulations, consider necessary.

(2) There shall be deemed to be incorporated in everymarketing licence issued under regulation 3(1)(h)(iv) a provisionthat requires the Minister to revoke the licence on conviction ofthe licensee for a contravention of regulation 3 of the AviationFuel (Sale) Regulations.

(3) Where a company is convicted of an offence underregulation 3 of the Aviation Fuel (Sale) Regulations, nothing insubregulation (2) shall apply if it is shown to the satisfaction ofthe Minister that the offence was committed without the consentor connivance of the Directors, or General Manager, Secretary orany other employee of the company and that they exercised allsuch diligence to prevent the commission of the offence as theyought to have exercised having regard to the nature of theirfunctions in that capacity and to all the circumstances.

(4) There shall be deemed to be incorporated in everylicence issued to a person under regulation 3(1)(d) and (h)(iii) thefollowing provisions as to the conduct of his business:

(a) in the case of a refining licence, that the refininglicensee shall dispose of petroleum products fordisposal and use in Trinidad and Tobago only to amarketing licensee [not being a person to whom alicence is issued under regulation 3(1)(h)(ii) or (iii)];

(b) in the case of a marketing licence issued underregulation 3(1)(h)(iii), that the marketinglicensee shall dispose of petroleum products onlyfor use in Trinidad and Tobago and in accordancewith any Orders made by the Minister undersection 31(3) of the Act.

Terms oflicences.[100/1974113/1974Ch. 3:03, s. 21].

232/1973.

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24. If a licence is not executed within one hundred and eightydays of the approval of the application, the right of the applicant tosuch licence shall be deemed to have lapsed, unless the delay isnot due to the fault of the applicant.

25. Unless the President otherwise determines, wherepetroleum rights which form the subject of an application areprivate petroleum rights, the Minister shall, subject to any otherwritten law, issue an Exploration and Production (Private PetroleumRights) Licence.

26. (1) A pipeline constructed in exercise of rights grantedunder an Exploration and Production or a Refining Licence thatextends beyond the licensed area, or any pipeline constructedoutside the area provided for by an Exploration and Production ora Refining Licence may, in the discretion of the Minister, bedeclared a common carrier pipeline.

(2) In the case of pipelines declared to be commoncarriers, the Minister shall by Order provide for the manner inwhich, and the terms and conditions subject to which, such pipelinesmay be utilised for the conveyance of suitable substances by thegeneral public.

27. (1) Where a pipeline, not being one declared a commoncarrier pipeline, has surplus capacity available and a licenseeother than the owner thereof desires to utilise such surplus capacity,the owner shall enter into negotiations with such licensee with aview to permitting such utilisation upon terms and conditionsagreed upon.

(2) In the absence of agreement, the matter shall bereferred to the Minister. If the Minister is satisfied that the pipelinecan, without prejudicing its proper and efficient operation for thepurposes of meeting the owner’s requirements for which thepipeline was designed, transport the requirements of the otherlicensee, then the Minister shall determine by Order the terms andconditions under which such other licensee may utilise the pipeline.

Time limit forissue oflicences.

Issue of licencesin privatepetroleumrights.

Common carrierpipelines.

Joint useof certainpipelines.




ASSIGNMENT28. (1) Unless the licence otherwise provides, an assignment

or transfer to another person of the rights acquired and theobligations undertaken shall not be valid without the previousconsent in writing of the Minister, and any assignment or transfermade without such previous consent shall be null and void andmay result in forfeiture of the licence.

(2) An application by a licensee for consent to assign ortransfer shall be made in writing to the Minister and shall beaccompanied by a fee of one hundred dollars. The applicant shallfurnish together with the application the same information in respectof the proposed assignee as is required to be furnished in the caseof applications for a licence.

29. (1) Where a licensee applies for the Minister’s consent tothe assignment of a licence to a non-resident company the Ministershall make it a condition that the said company shall observe theseRegulations concerning the establishment of a branch or agencyin Trinidad and Tobago.

(2) The Minister may in his discretion approve or refusethe application for assignment or transfer.

(3) The assignment or transfer of a licence shall not inany way absolve the assignor or transferor from the obligationsundertaken by him under the licence except to the extent to whichsuch obligations are in fact performed by the assignee or transferee.

OPERATORS RIGHTS30. No exploration operations shall be carried out in the areas

mentioned below—(a) areas in which operations shall be prohibited by

the Government for reasons of public interest orsecurity. The Minister shall cause to be publishedin the Gazette from time to time the necessarynotice for the identification of such areas;

(b) areas occupied by towns, buildings, roads,cemeteries and other public purpose installations.

Provisions as toassignments.

Additionalprovisions as toassignments.

Exclusion ofcertain areasfromexploration.

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31. There shall be specified in every licence such of thefollowing acts and other things that a licensee may do in connectionwith the petroleum operations carried on by him in submarine areasor on land that he has acquired within the licensed area, as areappropriate to such licence:

bore, dig, sink, drive, construct, make, use, maintain, operateand administer all such boreholes, pits, shafts, drifts, levels,excavations, dams, drains, watercourses, plants, tanks,reservoirs and other storage facilities, gas-oil separators,refineries, topping plants, casing head gasoline plants,sulphur plants and other facilities for searching for,producing, refining and otherwise treating crude oil andnatural gas, pipelines, pumping stations, power houses, powerstations, power lines, telegraph, telephone, radio and othercommunication facilities, factories, warehouses, offices,houses, buildings, ports, docks, harbours, piers, jetties,dredgers, breakwaters, submarine loading lines, and terminalfacilities, vessels, conveyances, railways, tramways, roads,bridges, ferries, airways, airports and other transport facilities,distribution and marketing facilities, garages, hangars,workshops, foundries and repair shops and all ancillaryservices required for the purposes of or in connection withauthorised operations and all such further and other rightsand powers as are or may become necessary or reasonablyincidental to the carrying out of operations, it beingunderstood that the erection of any railway lines, ports,aviation and telecommunication facilities, and powerstations shall require the previous consent in writing of theauthorities concerned.

32. Subject to the limitations provided for in the Act and theseRegulations, a licensee shall have the right to export all petroleum,petroleum products and petrochemicals won, saved ormanufactured from the licensed area and to sell the same, whetherin Trinidad and Tobago or abroad.

Acts and thingswhich may bedone by alicensee.

Right oflicensee topetroleum won.




33. The licensee may, for the purposes of his operations,appropriate and use free of charge, with the approval of the Waterand Sewerage Authority but subject to third party rights, any waterwhich he may find on or within State Lands and submarine areassituated in the area covered by his licence.

34. Where the licensee obtains a lease for the purpose ofoccupying for his exclusive use parts of the licensed area, parcelsof land so acquired may be enclosed with a fence, but nothing inthese Regulations shall affect the right of entry by the Minister forany of the purposes of the Act and these Regulations.

35. Before occupying any land as prescribed in the precedingregulation or clearing any land as prescribed in regulation 36, thelicensee shall give at least one month’s notice to the Commissionerof State Lands. If the latter has a valid objection to the proposedoccupation or clearing, such objection shall be notified to thelicensee in writing not later than twenty-one days from the date ofreceipt of the notice. If the licensee disputes the objection, thisshall constitute a dispute which shall be referred to arbitration asprovided for in the Act.

36. Where a licensee exercises any right, power or privilegeto clear any State Land by cutting or felling any undergrowth ortimber for the purpose of carrying out petroleum operations heshall comply with the State Lands Forest Produce Rules.

37. The licensee shall, if requested to do so by the Minister,relinquish without compensation any rights he may hold withrespect to a part of the surface of the licensed area, not exceedingin the aggregate one-tenth of the licensed area, required reasonablyfor public purposes, provided that if he proves to the Minister’ssatisfaction that the relinquishment of such lands would seriouslyinterfere with his actual or proposed operations, the request forrelinquishment shall be withdrawn.

38. (1) Where the Commissioner of State Lands considers itexpedient at any time to sell or lease the surface of any portion of

Use of water onState Land.

Power oflicensee toenclose leasedland.

Notice as tocutting andfelling trees.

Cutting orfelling timber.

1950 Ed.vol. IX p. 851.

Surrender ofportion oflicensed area forpublic purposes.

Sale or lease ofportion oflicensed area.

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State Lands included in a licensed area, notice in writing of suchintention shall be given to the licensee.

(2) Where the licensee considers that his rights under thelicence would be prejudicially affected by the proposed sale orlease, he shall so inform the Commissioner, and in the absence ofagreement the dispute shall be submitted to arbitration as providedfor in the Act.

39. (1) In the case of a licence relating to submarine areas,if the licensee reasonably needs to occupy a parcel of State Landsfor the purpose of carrying out his submarine operations, theMinister shall, on receiving an application therefor from thelicensee, cause a lease to be granted in consideration of asurface rent.

(2) Where such parcel of land is privately owned andPart II of the Act is applicable the licensee shall take such stepsthereunder to secure the grant of the lease.

40. A licensee shall be entitled, subject to the payment of anycustomary and non-discriminatory dues, charges or fees, to useGovernment ports, harbours, piers, docks and other facilities,where such utilisation is necessary for the purpose of carrying outhis operations.

41. Natural gas produced and utilised by an Exploration andProduction (Public Petroleum Rights) Licensee in refining orpetrochemical operations, shall be deemed gas sold by the licencefor the purpose of royalty assessment at a price which shall bedetermined in accordance with regulation 69.

GENERAL OBLIGATIONS42. (1) A licensee shall perform such of the general

obligations specified in subregulation (2) in his licence.(2) A licensee shall—

(a) in land areas, erect forthwith and at his ownexpense, and at all times maintain in repair visible

Land leases toenable conductof submarineoperations.

Use of ports andother facilities.

Natural gas usedin refining bythe producer

Generalobligationsof licensees.




boundary marks and pillars according to thedescription of the licensed area;

(b) carry out his operations with due diligence andact in accordance with sound petroleum industrypractice in the conduct of all operations and ensurethat all installations, apparatus, boreholes andwells are maintained in good condition;

(c) ensure that operations do not unreasonablyinterfere with other activities in the area and, inthe case of operations in submarine areas, careshall be taken to avoid pollution of the seas,beaches or tidal rivers to ensure that navigation,agriculture, fishing, authorised scientificresearches, and conservation of the livingresources of the sea are not unjustifiably hindered,and likewise that no damage is caused tosubmarine cables and pipelines;

(d) maintain appropriate and proper recordscontaining full data of all operations;

(e) keep in Trinidad and Tobago correct andintelligible books and accounts in a form fromtime to time approved by the Minister of—

(i) the quantities of petroleum won and savedfrom the licensed area;

(ii) the quantity of petroleum acquiredotherwise than in circumstances describedin paragraph(e)(i) above;

(iii) the disposal of petroleum, including—(A) petroleum used for the purposes of

carrying on drilling and productionoperations and pumping to fieldstorage within the licensed area;

(B) petroleum exported with the nameand address of the buyer, the quantitysupplied to each buyer, the price orother consideration and thedestination thereof;

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(C) petroleum delivered to each localrefinery and the price therefor;

(D) petroleum delivered to naturalgasoline plants and the productsrecovered therefrom;

(E) petroleum otherwise disposed of andthe manner of its disposal;

(iv) the methods and results of tests made onpetroleum and petroleum products;

(v) such other particulars as the Minister mayfrom time to time direct;

(f) minimise the employment of foreign personnel,ensure that such employees are engaged only inpositions for which the operator cannot, afterreasonable advertisement in at least one dailynewspaper circulating in Trinidad and Tobago,find available nationals of Trinidad and Tobagohaving the necessary qualifications andexperience; determine the rules of employmentincluding salary scales in such manner as to ensurethat all employees in the same category enjoyequal conditions irrespective of nationality;

(g) prepare, in consultation with the Minister,programmes for industrial and technical educationand training, including the grant of scholarships,and carry such programmes out diligently with aview to training nationals of Trinidad and Tobagoto replace foreign personnel as soon as reasonablypracticable and to affording nationals of Trinidadand Tobago every possible opportunity foroccupying senior positions in the operations ofthe licensee;

(h) exercise all possible care in order to avoid causingany unnecessary damage to the surface of thelicensed area or to trees, crops, buildings,structures and property thereon;




(i) pay reasonable compensation for any loss,damage or injury which may be caused by him,or by his agents or servants, to any otherperson in respect of such person’s rights ofany description;

(j) keep the Minister indemnified at all timesagainst any action, claim or demands of whatevernature which may be brought against the Ministerby any third party in relation to any matterarising out of the exercise of the rights grantedby the licence;

(k) comply with all instructions issued from time totime by the Minister that are reasonably necessaryfor securing the health, safety and welfare ofpersons employed for the purpose of operations;

(l) enable authorised representatives of the Ministerat all reasonable times to inspect the operationscarried out under the licence and to execute anyworks which the Minister may be entitled toexecute in accordance with the provisions of thelicence. Such authorised person may makeabstracts or copies of any records, maps, accountsand other documents which the licensee isrequired to keep in accordance with the provisionsof his licence. Such inspections shall not becarried out in such manner as unduly to hinder oraffect adversely the operations being conductedby the licensee;

(m) have regard at all times in the conduct ofoperations to the public interest and to the rightsand interests of Trinidad and Tobago.

TECHNICAL OBLIGATIONS43. A licensee shall observe the following requirements

where applicable:(a) no geophysical activity, drilling, re-drilling,

deepening or plugging of a borehole or well or

Technicalobligations oflicensees.

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any perforation of the casing shall be commencedunless notice is given to the Minister specifyingthe location of the survey area, borehole or welland his prior approval obtained;

(b) no fixed installation such as gathering stations,tanks, steam generating equipment and metersshall be erected unless prior notice thereof is givento the Minister and his approval obtained;

(c) the notice specified under paragraphs (a) and (b)shall be given at least twenty-one days before thecommencement of such activities. Where no replyto such notice has been given by the Ministerduring the twenty-one-day period, the applicationshall be deemed to have been approved;

(d) in granting his approval as required byparagraphs (a) and (b), the Minister shall haveregard to public and other reasonablerequirements arising out of the existence ofany street, square, road, beach, pipelines orother right of way, dwelling, industrial plant,public buildings, church or other place of worship;

(e) in the case of lands the surface of which is notoccupied or which is not required for publicpurposes all boreholes shall be so drilled as to besubstantially vertical; any material deviationfrom the vertical shall require the prior writtenapproval of the Minister;

(f) in the case of lands the surface of which isoccupied or required for public purposes,directional drilling from adjoining landswithin the licensed area shall be authorised bythe Minister on such conditions as heconsiders appropriate;

(g) except with the previous consent in writing of theMinister, no borehole or well shall be drilled sothat any part thereof is within a distance of three




hundred feet from the boundaries of the licensedarea on land and six hundred feet from theboundaries of the licensed area in submarine area;

(h) the licensee shall exert his utmost efforts todevelop any discovered fields to the maximumextent consistent with good petroleum industrypractice and in particular observe sound technicaland engineering principles regulating theconservation of the deposits of hydrocarbons, inpreventing damage to adjoining petroleumbearing strata, in controlling the flow, inpreventing the escape or waste of petroleumdiscovered, in preventing the entrance of fluidsthrough wells into petroleum bearing strataexcept in approved fluid injection operationsand in protecting water bearing strata encounteredin the course of drilling;

(i) all petroleum processing arrangements andcontracts shall be reported to the Minister, whomay, upon examining such arrangements andcontracts and inspecting the related plants andanalyses, call upon the licensee to alter anypractices which he considers to be contrary to thepublic interest;

(j) all petroleum won and saved from the licensedarea shall be measured or weighed by a methodor methods customarily used in good oilfieldpractice and from time to time approved bythe Minister;

(k) the licensee shall not make any alteration in themethod or methods of measurement or weighingused by him or to any appliances used for thepurpose without the consent in writing of theMinister, and the Minister may in any case requirethat no alteration shall be made save in thepresence of a person authorised by the Minister;

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(l) the Minister may from time to time direct thatany weighing or measuring appliance shall betested or examined in such manner, upon suchoccasions or at such intervals and by such personsas may be specified by the Minister’s directionand the licensee shall pay to any such person orto the Minister such fees and expenses for thetest or examination as the Minister may specify;

(m) where any measuring or weighing appliance isupon any such test or examination as is mentionedin the last foregoing paragraph, found to be falseor unjust, the same shall, if the Minister sodetermines after considering any representationsin writing made by the licensee, be deemed tohave existed in that condition during the periodsince the last occasion upon which the same wastested or examined pursuant to paragraph (l);

(n) where any mineral not specified in the licence isdiscovered on or within any of the lands describedin the licence, the licensee shall report the sameto the Minister without delay;

(o) representative samples of the seabed, strata,petroleum, water or other minerals encounteredin any borehole or well in the licensed areashall be correctly labelled and preserved forreference and testing, and where required by theMinister, representative specimens not exceedingone-half of any such samples shall be deliveredto the Minister who may retain any specimenso delivered;

(p) no borehole or well shall be abandoned and nocemented string or other permanent form of casingshall be withdrawn from any borehole or wellwhich it is proposed to abandon without the priorconsent in writing of the Minister;




(q) before the expiry or determination of a licence,the licensee shall, unless the Minister otherwisedetermines, plug all wells drilled by him. Suchplugging shall be done in accordance withspecifications from time to time approved bythe Minister;

(r) the Minister may require in every case where thelicensee intends to abandon a borehole or wellfrom which potable water can be produced orwhich may be used for any public purpose thatsuch borehole or well be transferred in ownershipto the Water and Sewerage Authority without thepayment of any compensation. The licensee shallbe relieved of all liability in respect of suchborehole or well and the supply thereof as fromthe date of such transfer, without prejudice to anyrights or obligations which may have arisen beforesuch date;

(s) the licensee shall take all reasonable precautionsand safety measures to prevent the occurrence ofblowout and fire, to ensure that water resourcesare not damaged or contaminated by the escapeof petroleum or other material used in the courseof operations, to take care that gas is not liberatedin such manner as to cause pollution of thesurrounding air, and to prevent all waste. Withoutprejudice to the generality of the foregoing heshall strictly observe such Orders and directionsthereon as are promulgated by the Minister fromtime to time;

(t) where at any time during the currency of a licencethe Minister finds that the strata in the licensedarea, in whole or in part, form part of a singlereservoir in respect of which other licences are inforce, and the Minister considers that it is in thepublic interest, in order to secure the maximum

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ultimate recovery of petroleum and to avoidunnecessary competitive drilling, that thereservoir should be worked as a unit with theco-operation of all concerned, the followingshall apply:

(i) the licensees concerned, who shall bedetermined by the Minister, shall, uponbeing so required in writing by the Minister,cooperate in order to prepare a programmefor the working of the reservoir as a unit,and shall jointly submit such programmeto the Minister for approval;

(ii) where a programme is not submitted to theMinister within the time which the Ministerhas fixed, or a programme is submitted to,but is not approved by, the Minister, theMinister shall himself prepare a programmeand shall communicate it to the licenseesto be put into effect;

(iii) where one or more of the licensees objectto the programme prepared by the Minister,he or they may, within twenty-eight daysof receipt of the programme, submit thematter to arbitration in accordance with theprocedure prescribed in the Act,

and this paragraph shall apply where relevant alsoin the case of Exploration and Production (PrivatePetroleum Rights) Licences;

(u) a Refining Licence or Petrochemical Licenceshall contain a condition to the effect that thelicensee shall give preference in his operationsto the processing of indigenous petroleumand (where it is shown to be in the publicinterest and economically feasible) to themanufacturing of such petroleum products orpetrochemical products or both as are requiredfor domestic consumption;




(v) the Minister may require a Refining Licensee toundertake to deliver to the Government at currentwholesale prices such reasonable part of anyparticular product manufactured by him as maybe required for domestic consumption, save thatno licensee shall be required to supply suchproduct in quantities exceeding ten per cent ofthe total quantity manufactured by him.

WORK OBLIGATIONSEXPLORATION AND PRODUCTION

(PUBLIC PETROLEUM RIGHTS) LICENCE

44. The licensee shall be required to spend on explorationoperations during the first three years a minimum sum annually(hereinafter referred to as “the expenditure obligation”) to bedetermined in the case of each licence by agreement between theMinister and the licensee, and to be specified in the licence.

45. (1) The licensee shall be required to deliver to the Ministeron the effective date a guarantee, in the form of a bond or banker’sguarantee or in such other form acceptable to the Minister, for thetotal amount of the expenditure obligation stipulated.

(2) The amount of such bond or guarantee shall be reducedat the end of each twelve-month period by the actual explorationexpenditure of the period upon presentation of all technical dataobtained from the surveys made and the interpretation thereof aswell as data and results from any other work performed thereon.

46. (1) Within sixty days after the end of each twelve-monthperiod, the licensee shall report to the Minister his actualexpenditure during the said period, in such detail and together withsuch supporting evidence as the Minister may require.

(2) Sums overspent in any annual period may be carriedforward for the purpose of set-off against what would otherwisehave been the annual expense obligation for succeeding years.

Expenditureobligation.

Guarantee as toexpenditureobligation.[190/1989].

Report ofexpenditure tobe made tothe Minister.

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47. At the end of the first three-year period and of any othersubsequent period there shall be determined the sums which thelicensee has spent up to that date and one-half of any amount bywhich the said sum may fall short of the relevant expenditureobligation shall be forfeited to the Government and is recoverablesummarily as a civil debt.

48. (1) Exploration operations on a scale that has been agreedbetween the Minister and the licensee and specified in the licenceshall be commenced by the licensee not later than one year fromthe effective date.

(2) A licensee who fails to comply with the requirementsof subregulation (1) is liable to the termination of his licence at thediscretion of the Minister.

49. (1) Within such maximum period from the effective dateas is determined as appropriate and specified in the licence, thelicensee shall commence the drilling of at least one well.

(2) A licensee who fails to comply with the requirementsof subregulation (1) is liable to the termination of his licence at thediscretion of the Minister.

50. Where a person who is the holder of an Exploration andProduction Licence finds petroleum in commercial quantities, itshall be produced without unreasonable delay, and production shallcontinue without interruption, unless the Minister is satisfied thatthe interruption is justified for technical or other reasons.

51. (1) Subject to regulation 52, an Exploration andProduction Licensee shall obtain a Refining Licence and commencethe erection in Trinidad and Tobago of a refinery with a minimumcrude oil through-put capacity of at least fifty per cent of theaggregate average daily production where the aggregate averagedaily production of crude oil from all licensed areas held bysuch licensee—

(a) amounts to one hundred thousand barrels per day(such amounts of crude being assessed in themanner determined by the Minister by Order); or

Shortfall inexpenditureobligations.

Time limit forcommencementof exploration.

Maximumperiod forcommencingdrilling.

Duty to producepetroleum ondiscovery incommercialquantities.

RefiningLicence anderection ofrefinery.




(b) exceeds fifty thousand barrels per day and theaggregate proven reserves underlying all licensedareas held by the said licensee are sufficient tosupport continuation of aggregate average dailyproduction of one hundred thousand barrels perday for a future continuous period of seven andone-half years (such proven reserves and forecastsof future aggregate average daily production tobe estimated in the manner determined by theMinister by Order).

(2) The licensee shall complete the refinery and put it intoefficient working order with due diligence and dispatch, but inany event within three years from the date on which the site ofsuch refinery was finally approved.

(3) When there occurs, subsequent to the granting of arefining licence as provided in subregulation (1), an increase inaggregate average daily production of one hundred thousand barrelsper day [all as contemplated by and determined in the mannerprovided in subregulation (1)], the licensee shall make approvedadditions to refinery capacity adequate to deal with at least fiftyper cent of such increase in aggregate average daily production.

52. The Minister may, on application by a licensee, permithim, in lieu of acting as required by regulation 51, to make suchother arrangements for the refining and disposal of the oil as maybe considered appropriate by the Minister.

53. (1) A licensee whose total production does not reach thelevels provided for by regulation 51(1)(a) or in the case ofregulation 51(1)(b) the levels and the person receiving thereinspecified may be required to deliver his production to refineriesin Trinidad.

(2) In case the producer and refiner cannot agree as to theterms and conditions of supply and processing crude oil, the mattershall be referred to arbitration as provided for in the Act.

Saving as toregulation 51.[190/1989].

Duty torefine locally.

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54. The President may require a licensee to refine, or haverefined in Trinidad and Tobago up to one hundred per cent of thecrude oil produced by him, if the refineries in Trinidad and Tobagohave available refining capacity.

FINANCIAL OBLIGATIONS

55. The licensee’s financial obligations towards the Treasuryshall consist, where applicable, of minimum payment, rent, royalty,petroleum impost, corporation tax and other payments and eachlicence shall contain the specified obligations pertaining thereto.

MINIMUM PAYMENTS AND RENTAL ON EACH LICENCE

56. Subject to regulation 58, every Exploration and Production(Public Petroleum Rights) Licensee shall pay in respect of eachacre of State Land and Submarine Area held by him from time totime throughout the period of the licence, such minimum paymentat such rates as are fixed by the Minister and specified in the licence.

57. (1) Minimum payments shall be payable quarterly inadvance within the first ten days of January, April, July and October.

(2) No refund shall become due if before the end of aquarterly period a part of the area has been surrendered.

58. In respect of any quarterly period for which royaltiesbecome payable on a licence, where the sum of such royalties isequal to or exceeds the amount already paid as minimum paymentfor the same period, then the amount of minimum payment so paidshall be deducted from the royalties payable in respect of suchquarterly period.

59. It shall be a condition specified in an Exploration andProduction Licence that—

(a) if the minimum payment, rents or royaltiespayable by a licensee, or any part thereof, remainunpaid for the period of thirty days next after thedue date of payment, the Minister may enter on

Power to requirerefining as towhole ofproduction.

Financialobligationsspecified.

Minimumpayment tobe specified.

Payablequarterly.

Minimumpayment whereless deductiblefrom royalties.

Distraint byMinister.




the lands and premises occupied by the licenseeand distrain on all or any of the stock of petroleumand petroleum products and all things found inor upon the premises;

(b) if within fourteen days after the date of thedistraint, the sums due still remain unpaid, theMinister may sell all or any part of the goods sodistrained, recovering therefrom the amounts dueand paying the surplus, if any, to the licensee;

(c) if the Minister acts under the foregoing provisionsof this regulation he shall be indemnified by thelicensee against all actions, claims, liabilities andother obligations to such licensee arising directlyor indirectly from such action, notwithstandingthat by any rule of law the licensee would not beso liable.

60. The licensee shall pay for all State Lands which he maytake up on lease, use or occupy for the purpose of the licence anannual surface rent and any other payment usually applicable tosuch grants at such rate per acre as the Minister may fix and specifyin the licence, or in the case of land that is State Land by reasononly of section 2(3) of the Act, at such rate per acre as may beagreed between the parties.

ROYALTY

61. (1) Every Exploration and Production (Public PetroleumRights) Licensee shall pay a royalty at a rate to be stipulated in thelicence on the net petroleum won and saved from the licensed area.

(2) The basis for determining the value of petroleum forthe purposes of calculating royalty payments in cash shall be arrivedat by agreement between the Minister and the licensee on termsspecified in the licence by adopting the criteria specified inregulations 66 to 69 inclusive.

62. All petroleum that is proved to the satisfaction of theMinister to have been used by the licensee within the licensed area

Surface rentsfor leases ofState Lands.

Royalty payableat stipulatedrate.[190/1989].

Petroleum usedin petroleumoperations oflicensee,exempted.

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for the carrying out of petroleum operations including gasinjection and other approved field operations shall be free of royalty.

63. The Minister, upon the prior approval of the Cabinet, mayreduce the rate of royalty specified in the licence for any period ifsuch reduction is found necessary in the public interest.

64. (1) The Minister may, by notice in writing of not less thanninety days, elect to take petroleum in kind in lieu of the whole orpart of the royalty due.

(2) Such petroleum as the Minister elects to take in kindshall be delivered by the licensee free of all transportation orhandling charges at any established receiving installation alongthe route over which petroleum is conducted from the place ofproduction to the refinery or seaboard terminal as the Ministermay direct.

(3) The Minister may require a licensee to hold suchpetroleum as he elects to take in kind in storage at the field or atthe terminal, free of any storage charge, but not for a periodexceeding thirty days.

(4) Any petroleum of which the Minister does not disposewithin the period mentioned in subregulation (3) or for whichfurther terms of disposal have not been agreed upon shall be deemedto have been sold to the licensee at the same prices as apply in thecalculation of royalty paid in cash and the sums payable in respectthereof shall be a debt due and payable to the Treasury.

65. The methods of sampling crude oil, analysing anddetermining the percentage content of each component fractioncontained therein shall be agreed upon between the licensee andthe Minister.

66. (1) Subject to regulation 68, the value of crude oil for thepurpose of payment of royalties shall be the field storage value.

(2) The field storage value shall be calculated byaggregating the values of the volume of the component fractions

Power ofMinister toreduce royalty.

Election totake petroleuminstead ofroyalty.[190/1989].

Method ofsampling crude.

Value ofcrude—fieldstorage value.




in the crude oil and deducting therefrom a refining and handlingallowance equal to nine per cent of such aggregate of values.

(3) The value of each fraction contained in the crude oilshall be determined by reference to the average for the quarterlyperiod of the daily mean of the high and low prices as quoted inPlatt’s Oilgram Price Service for Gulf Coast cargo lots forrefined products.

67. (1) Subject to regulation 68, the value of naturalgasoline for the purpose of payment of royalties shall be its fieldstorage value.

(2) The field storage value shall be calculated by multiplyingthe net volume produced by the price of natural gasoline.

(3) The price of natural gasoline shall be determined byreference to the average for the quarterly period of the daily meanof the high and low postings as quoted in Platt’s Oilgram PriceService for Gulf Coast cargo lots for 94 octane, regular motorgasoline, and by deducting therefrom the appropriate discount tobe agreed between the Minister and the licensee.

67A. (1) For licences to be issued after the commencementof the Petroleum (Amendment) Regulations, 1989, the fieldstorage value of crude oil and natural gasoline to be fixedrespectively under regulation 66(1) and 67(1) shall be calculatedby using international market prices of selected reference crudeswhich are similar in quality and which are widely traded at anarms length basis.

(2) In determining the field storage value undersubregulation (1) consideration shall be given to the following:

(a) the transportation differential between the cost oftransporting to the price-setting market, thereference crudes and the crude to be valued;

(b) interest charges on the value of the inventory intransit, in determining the transportation costs;

(c) such other circumstances prevailing at the timeof issue of the licence.

Value of naturalgasoline—fieldstorage value.

Calculationof fieldstorage value.[190/1989].

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68. Where the price basis for any of the component fractionsor natural gasoline is not published in Platt’s Oilgram or in anyother publication acceptable to the Minister and the licensee, anequitable price shall be determined by agreement between theMinister and the licensee.

69. (1) The value of natural gas for the purposes of paymentof royalties shall be calculated, in the case of transactions betweendifferent petroleum operations of a licensee, by multiplying thevolume required to be assessed by the weighted average of theactual price.

(2) For the purposes of subregulation (1), the actual priceshall be based on the total gas sales to companies outside thepetroleum producing and refining industries during the previousyear, at the point of utilisation or export.

70. (1) Subject to this regulation, on or before the twenty-first day after the end of each quarterly period of the year, thelicensee shall estimate the royalty to be paid on each licence inrespect of that period and shall pay the amount thereof to theMinister after deducting the value of any petroleum taken in kind.

(2) The Minister may estimate the amount of royaltypayable where—

(a) the licensee fails to make the estimate requiredby subregulation (1); or

(b) the Minister considers that the estimate made bythe licensee is less than a proper estimate,

and upon making demand therefor in writing, of such licensee,subregulation (1) shall apply accordingly, as if the Minister’sestimate was the estimate of such licensee.

(3) Where the sum of royalties payable in respect of anyquarterly period on each licence is less than the amount alreadypaid as minimum payments for that period, no royalty shall bepayable on that licence in respect of that period.

Agreement asto prices incertain cases.

Value of naturalgas—howdetermined.

Quarterlyinstalments ofroyalty payable.




71. (1) Within ninety days following the end of each year thelicensee shall calculate for each licence, the total amount of royaltyin respect of that year after deducting the value of any petroleumtaken in kind and submit to the Minister a statement thereof togetherwith any balance of royalties shown thereby to be due, or a claimfor refund of any royalties shown thereby to have been overpaid.

(2) The Minister shall assess the royalties payable, andany adjustment found necessary in respect of the aggregate royaltypayments already made for the year in question, on the basis ofquarterly estimates, shall be made forthwith.

(3) In this regulation and in regulation 70, “year” meansthe period of twelve months commencing on the 1st January ineach year.

PETROLEUM IMPOST

72. (1) Every licensee shall pay a petroleum impost in respectof all petroleum won and saved, at such rates as the Minister maydetermine by the issue of a Rating Order, which shall be publishedin the Gazette at least thirty days prior to the date on which thepetroleum impost becomes payable.

(2) The Rating Order shall specify the rates of petroleumimpost payable in respect of crude oil and natural gas won andsaved during the year ended on the 31st December preceding thedate on which the petroleum impost becomes payable.

73. The rates specified in the Rating Order shall be socalculated and determined as to provide in the aggregate the fundsnecessary to cover all the annual expenses of the Ministry, includingsalaries, pension contributions, maintenance and other expensesof or incidental to, the due administration of the petroleum industry.

74. Where a licensee ceases operations before the issue of aRating Order relating to the year in which he so ceases to operatehe shall pay petroleum imposts at the rates specified in the RatingOrder of the preceding year.

Annualstatement ofroyaltiescalculated andassessed onaccountingperiod.

Petroleumimpost charged.

Petroleumimpost to coverexpenses ofadministration.

Impost oncessation ofpetroleumoperations.

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OTHER PAYMENTS

75. Every licensee shall be subject in respect of his incomederived from petroleum operations to income tax or corporationtax or both in accordance with the rates and rules of assessmentprescribed from time to time by the law relating thereto.

76. Subject to any exemptions granted by or under any writtenlaw licensees shall be liable to the payment of import duties andexcise duties.

77. Licensees shall pay current charges and fees for anyservices rendered by the Government or statutory authorities tothem including tolls and water and sewerage rates, and fees ofgeneral application including property taxes, documentary stamptaxes and registry, patent and copyright fees.

78. (1) In addition to the deposit relating to the expenseobligation as set out in an Exploration and Production (PublicPetroleum Rights) Licence, the licensee shall, immediately uponthe grant of a licence, deposit with the Treasury, in the case of—

(a) an Exploration, Pipeline, Refining andPetrochemical Licence, the sum of twentythousand dollars; and

(b) an Exploration and Production (Public PetroleumRights) Licence, the sum of two hundredthousand dollars,

in cash, securities or other form of guarantee acceptable tothe Treasury.

(2) A deposit required by subregulation (1) shall duringthe continuance of operations be maintained at the full amountuntil such time as the Minister issues a certificate to the effect thatthe licensee has ceased to engage in petroleum operations andhas completely discharged his obligations under the licence,whereupon the deposit or the part thereof remaining at such dateplus any interest that may have accrued thereon shall be returnedto the licensee.

Licensees liableto income taxand corporationtax.

Import andexport dutiespayable butsubject toexemptions.

Usual rates andcharges payableby licensees.

Additionaldeposits.[190/1989].




79. The Minister may by Order determine the circumstancesin which the deposit provided for in the preceding regulation maybe drawn up in satisfaction of obligations and duties imposed onthe licensee and the procedure by which the Treasury shall makethe necessary payment out of the deposit.

80. Minimum payments, royalties and rents becoming due bythe licensees shall be paid in Trinidad and Tobago or United Statescurrency at the option of the Government or in any other currencyacceptable to the Government.

INFORMATION

81. Licensees shall at their own expense prepare and furnishto the Minister, information, returns and data concerning theiroperations in such manner and detail as the Minister shall by Orderprescribe from time to time.

82. Exploration and Production Licensees shall submit withina reasonable time accurate copies of all maps, sections and reportswhich have been prepared, and of all electric and other logs takenduring the course of operations, together with reservoir rock andfluid analyses, pressure survey data as well as all importantscientific and technical data and interpretations thereof resultingfrom the conduct of their operations.

83. Within sixty days after the end of each calendar year aPetrochemical Licensee shall furnish to the Minister a report, insuch form as the Minister shall by Order prescribe, containing theinformation listed hereunder, in respect of the preceding year—

(a) the quantity, source and price of indigenous andforeign hydrocarbon raw materials received in thelicensed area;

(b) the output of each licensed petrochemical product;(c) the quantity, destination and price of licensed

petrochemical products sold in Trinidad andTobago and exported;

Orders as toforfeiture ofdeposits.

Currencypayable inrespect offinancialobligations.

Licensees tofurnish data.

Licensees tosupply maps,etc.

Annualreport byPetrochemicalLicensee.

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(d) the number, nationality, duties and remunerationof persons employed;

(e) such other particulars as the Minister may fromtime to time require.

84. A Petrochemical Licensee shall furnish in duplicate to theMinister on or before the fifteenth of each month, in a form fromtime to time approved by the Minister, a report on the progress ofhis manufacturing operations during the previous month. Suchreport shall contain statements showing—

(a) the quantity, source and price of indigenous andforeign hydrocarbon raw materials received in thelicensed area;

(b) the output of each licensed petrochemical product;(c) the quantity, destination and price of licensed

petrochemical products sold in Trinidad andTobago and exported;

(d) such other particulars as the Minister may fromtime to time require.

85. Within sixty days after the end of each calendar year, aPetrochemical Licensee shall furnish in duplicate to the Minister areturn, in such form as the Minister shall require, showing theaccounts of the operations carried out during the previous year.

86. Within ninety days after the date on which production inmarketable quantities commences in relation to each plant specifiedin a Petrochemical Licence, the licensee shall deliver to the Ministerin duplicate—

(a) the final plans of the plant with all the necessarystatements and exhibits so as to give a clear andprecise idea of the process units, buildings, tanksand auxiliary installations which comprise sucha plant; and

(b) a statement showing the final extent of theinvestment in fixed and other capital involved inthe Construction and equipment of the plant.

Monthlyreport ofPetrochemicalLicensee.

Annual returnas to accounts ofPetrochemicalLicensee.

Initial return oncommencementof production byPetrochemicalLicensee.




DETERMINATION

87. The licensee shall be at liberty to determine his licence inwhole or in part, on giving to the Minister not less than one hundredand eighty days notice in writing. Such determination shall notaffect any obligations or liability imposed on or incurred by thelicensee under the licence that have not been performed ordischarged prior to the date of determination.

MISCELLANEOUS PROVISIONS

88. (1) The Minister may grant permits for searching, diggingfor and mining of minerals or substances other than petroleumwithin licensed areas subject to the undertaking by the person sopermitted that exploration or mining will not endanger or encumberor add to the cost of petroleum operations.

(2) A licensee affected by the grant of a permit undersubregulation (1) shall afford the opportunity for acquiringreasonable means of access and safe and convenient passage forthe conduct of mining operations.

89. A licence for operations in submarine areas shall notconfer any surface rights to the foreshore lying between high waterand low water marks at ordinary spring tides, and no use shall bemade thereof by the licensee, unless the authority of the Ministeris obtained.

90. The Minister may by Order fix the maximum prices thatmay be charged by a licensee for the sale of petrochemicals withinTrinidad and Tobago.

91. Where a licensee fails to execute any works required to becarried out under the terms of his licence including the measurementof petroleum, the plugging of wells, the adoption of safety healthand welfare measures and the prevention of pollution, the Ministermay, if he considers it expedient, cause such works to be executedand the Minister shall in such case recover the costs and expensesincurred from the licensee, save that before so acting and whereno emergency exists, the Minister shall give the licensee fourteendays notice to afford him a final opportunity of remedyinghis default.

Voluntarydeterminationof licence.

Power to permitmining for otherminerals inlicensed areas.

Petroleumoperations insubmarineareas—rights toforeshore.

Price Orders—petrochemicals.

Minister mayremedy defaultof licensee.

L.R.O. 1/2006




92. A pipeline, refinery, petrochemical plant, well, marketingstation or any similar installation used for petroleum operationsmay not be enlarged or substantially altered without the priorwritten consent of the Minister.

93. The Minister may at any time call upon an Explorationand Production Licensee to deliver to him without compensationany quantity of natural gas, produced in association with crudeoil, not being required by the licensee for his operations or forsale, which may be needed in the public interest, except that wherethe recovery, delivery or storage of such natural gas requires theconstruction of any new facilities, such facilities shall be providedby Government. Such natural gas shall be free of royalty.

94. A person who contravenes any of the provisions of theseRegulations, except where the provision by or under which theoffence is created provides the penalty to be imposed, is liable onsummary conviction to a fine of one thousand dollars, and in thecase of a continuing offence to a further fine of one hundred dollarsfor each day during which the offence continues after conviction.

No alteration toplant, etc.,withoutpermission.

Unusednatural gas.

Offences andpenalties.

Chap. 62:01 Petr oleum PETROLEUM REGULA TIONS€¦ · L.R.O. 1/2006 [Subsidiary] LA WS OF TRINIDAD...

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Transcript of Chap. 62:01 Petr oleum PETROLEUM REGULA TIONS€¦ · L.R.O. 1/2006 [Subsidiary] LA WS OF TRINIDAD...